Get paid. Two words that put the proverbial exclamation mark on the end of sales. Get paid--then and only then--is the sale done. Thanks to the payment processing industry's tinkering with technology, paydays for DR marketers are getting easier and coming faster.

Today, payment processing

Those options include:

E-checks--Consumers can use them over the Internet or phone to pay bills or order products and no signature is required for the check to clear.

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E-invoices--Customers get E-mails that allow them to see their bill, download it and print it. They can also pay over the Internet with an E-check.

Electronic check recovery--Converts bounced paper checks into electronic checks so they can be collected electronically.

Post-sale conversion--A merchant can process paper checks via a check reader and a PC and collect funds within 48 hours without going to the bank and without bank deposit fees.

And that's just a start, as many payment processing companies serving the DRTV industry are introducing different technological advances designed to make the marketer's life easier.

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For example, CambridgEcommerce, and electronic funds processor in Vista, Calif., has all those options plus "General Ledger Posting." The company says all its products can be made to post automatically to general ledgers. It saves merchants the hassle of inputting or updating general ledgers for any E-check activity or checks that have bounced.

Or take AmeriNet Inc., an electronic transaction processor in Santa Monica, Calif., which offers a product called "debit-it!," an electronic funds transfer tool that doesn't require consumers to know which part of the check code to enter. Instead, the customer is simply asked to provide the Magnetic Image Character Recognition (MICR) exactly as it is printed on the check.

Then there's Paymentech, a national electronic payment processor in Dallas that has created a fraud management tool that lets merchants set automatic acceptance or rejection parameters for transactions based on a combination of authorization codes, address verification and card-number verifications. Merchants can accept credit cards within 48 hours with just an Internet connection and a Web browser. Cardholders can also authenticate themselves when they buy with a password that's registered with their credit card company. And merchants can extract data on payment methods, cardholder details, retrievals and chargebacks (when consumers return items they purchased with a credit card).

First American Payment Processing in Phoenix now has a system that allows its customer service reps to simply enter a customer's checking account information, hit enter, and the system runs validation screens on the information and then returns an approved or decline code within seconds. Plus, customer service reps can ask for an alternative source of payment while the customer is still on the phone.

Soaring Sales

All these technology and payment options can make sales soar. Bruce Froendt, president and CEO of DPI Merchant Services, a transaction processor for non-face-to-face purchases based in Omaha, Neb., says payment methods make selling and buying easier. "Consumers are much more likely to buy and merchants can capture higher conversion rates, converting more potential sales into actual sales," Froendt says.

Robert Graham, senior vice president of SKO Brenner American Consumer Division, a customer retention and collection agency that provides first- and third-party contact resources and credit controls based in Farmingdale, N.Y., agrees with Froendt. "The options make consumer purchases simple and affordable," he says.

The numbers appear to back up Graham and Froendt. AmeriNet says in 2002, there was an increase of more than 600 billion electronic check transactions--an 11-percent increase over 2001. And get this: those transactions translate into $18.2 trillion.

NACHA--The Electronic Payments Association in Herndon, Va., reports during second-quarter 2003, telephone electronic initiated transactions increased 123 percent and Internet electronic initiated transactions increased 276 percent from the same quarter in 2002.

The future looks good, too. According to The Nilson Report, a newsletter that covers consumer payment systems, electronic forms of payment such as E-checks and ACH (Automated Clearing House, where consumers give permission to have funds taken directly from their checking accounts) will double by 2007.

No doubt, convenience of payment options, such as E-checks, can drive consumers to buy. But demographics also play a role. CambridgEcommerce estimates that 78 million adults in America either don't have credit cards or have maxed out existing credit cards. So consumers need checks to buy--and E-checks are helping marketers tap that market.

Some payment processing experts say that not accepting electronic checks excludes about 35 percent or more of the U.S. population who can't qualify, are over limit or are past due on their credit cards.

New Rules of the Road

But Froendt says with all the good news comes some sobering rules marketers need to heed. With all those account numbers floating in cyberspace, the issue of identity theft creeps into the equation quickly. Froendt says any-one who collects and stores data on consumers has to meet guidelines or face some serious consequences.

He says it's "vital that marketers are proactive" in learning about--and setting policies in place to comply with--all the new laws, rules and regulations that relate to information security.

The federal government has passed the Graham-Leach-Bliley Act that relates to consumer financial privacy. And Mastercard and Visa have both set out rules and regulations that can cost marketers and payment processors five- and six-digit fines.

All of this places an incredible responsibility for information on the merchants and payment processors. "The guidelines are strict and stringent and they can lead to civil and criminal charges," says Froendt. "Companies need to realize this is a big issue that's not going away."

Froendt also says that Mastercard and Visa have rules related to charge-backs. "Credit card companies see chargebacks as very onerous and they're working to prevent them," he contends. "In particular, the direct response industry sees more chargebacks because at a retail store, consumers can touch what they buy, so the more attention direct response companies put on this issue, the better for them in the long run."

Picking Partners

In addition to learning rules and regulations, experts say DR marketers need to be picky when it comes to hiring a payment processor. "These people are going to be in your pants and in your pocket," says Graham. "Trust is a major issue. Make sure you take your time when hiring."

Graham adds finding a firm that has a solid plan in place to handle declines (when payments stop for whatever reason) is crucial. "That's a data capture issue and you want a company that can give you an automatic resubmission for those customers," he says. "And you want to find out the cost to set that up if they don't have it in place. You also want them to be able to quantify metrics and what the payback is for those efforts."

Graham also advises to look for the companies that have clients similar to your business and then talk to those clients and see what they have to say about what they'd change or dislike about the company. "Ask the tough questions," he says. "You want someone who's been down the same road. I'd also recommend you feel very confident in the company's management team and that the team has plenty of experience."

In addition, Graham says when you go with a company, take time at the start to set up realistic expectations for each other--about what each company will deliver. And Froendt says to look for certifications, best practices and guidelines in areas that relate to the work you expect.

If you're open to new payment methods and all the technology that comes along with them, and you're diligent about following the rules, you'll likely be getting paid faster. That's a goal worth pursuing.

RELATED ARTICLE: Making Sure You Get Paid

No matter how many bells and whistles the payment processing industry adds, payments can sometimes get hung up.

Robert Graham, senior vice president of SKO Brenner American Consumer Division, a customer retention and collection agency based in Farmingdale, N.Y., says, in particular, credit card multi-pay or easy-payment credit terms can present problems. "Credit cards can reach their limit, get stolen, become expired and a card's account can be closed due to death, divorce or delinquency," says Graham.

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All of those events can mean "soft declines," which occur when the card expiration date passes, the account is stolen, lost or closed or is at its limit. Graham says that as the payment terms are extended, the likelihood of a soft decline increases as well as slowing a marketer's cash flow.

With soft declines, the cardholder is often unaware that a decline occurred so the merchant will need to start a recovery effort with the customer to reinstate the payment process and restore the relationship. Graham says these recovery efforts can yield a 35-percent to 50-percent payment conversion when customer retention and collection campaigns are conducted together.

"The first recovery stage goals are rein-statement and payment," says Graham. "This approach recognizes the long-term value of the customer relationship, such as future sales with new offers or rein-statement in continuity programs."

This recovery effort is postured as coming from the marketer, notifying the customer of the situation, and requesting an alternative form of payment. Often these accounts can be converted to single pay. Typically, during the first 60 days of a retention effort, 18 to 25 percent of accounts will be paid or rein-stated.

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For those consumers who don't respond to a customer retention effort, Graham says their accounts should be placed with a collection agency. He also says when selecting a collection agency, be sure that it specializes in direct marketing offers and tailors its approach to meet both the financial and sales objectives of the marketer.

"Collection agencies that specialize in meeting the direct marketer's needs will offer both customer retention and collection resources," Graham adds.

So why even offer easy payments when there is such a risk?

"While there is a hidden cost to multi-pays, they are irresistible to the impulse buyer and they're a proven way to boost responses," contends Graham. "Quite simply, the benefits outweigh the risks. Installment plans allow companies to offer a higher quality or perceived value product, while maintaining a more affordable price point for the consumer."

Graham adds that most responders can be upsold or enrolled in a continuity program that enhances the long-term value of the relationship for the marketer. "This is especially true when the proper recovery techniques are applied to convert the soft credit card declined account back into paying customers," he says. "Remember, it is far less expensive to convert a soft decline account than acquire a new customer."

Graham says 85 percent of pay history customers will pay their bills. He also says exercise equipment, household, and health and beauty aids are some of the categories retaining customers and maximizing profits using easy-payment methods.